EDS shuts datacentres and shifts work to India

Outsourcer EDS is to close 21 of its datacentres in the US and Europe by the end of next year and move some of the work to India and other cheaper locations to cut costs.

EDS chief financial officer Bob Swan said that the company would close 17 of its 42 US datacentres and four of its 12 centres in Europe that manage software for customers.

EDS already has three datacentres in India and the operation there is now set to expand, helped by the lower wage costs. Speaking to financial analysts about the move, Swan did not say how many jobs would be lost in the US and Europe as a result of the decision.

Around a quarter of EDS’s 120,000 employees currently work on software development. The job losses will be part of the 15,000 to 20,000 EDS said it planned last autumn, ahead of its year-end financial results.

EDS returned to profitability in 2004 after a loss-making 2003 when it had to restate its quarterly results.

In 2004 EDS posted a profit of £88m against a loss of £944m in 2003. Sales, however, were stagnant at £11.44bn.

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